Horwitz v. Ellinger

Alvey, J., delivered the opinion of the Court. Prior $o, and on the 2d of April, 1867, James E. Purvis ⁵⁰¹ and James E. Purvis, Jr., under the firm style of Parvis & Co., were doing business in the city of Baltimore as bankers, and on that day (the 2d of April, 1867,) the appellee, being one of the customers of the house, deposited with it, in the usual way, the sum of $5,335.22. This deposit was made shortly after 1 o’clock, and was subject to a small check that had been drawn by the depositor some few hours before, and which, being paid, reduced the appellee’s credit to $5,101.88, the amount sued for in this case. At the usual hour, on the day of the deposit, the banking house closed, and was never again opened for business, and the members of the firm, regarding themselves as insolvent, and unable to meet their liabilities, at once set about making a general assignment of all their property for the benefit of their creditors, without preference, except such as is made and recognized by law, in the application of the partnership and separate funds to the payment of partnership and separate debts respectively, by way of priority.

Such assignment was made to Mr. Horwitz, the appellant, as trustee, on the 3d of April, 1867, and he at once accepted the trust, and assumed control of all the property assigned. This having been done, the appellee, on the 5th of April, 1867, caused an attachment, under the provisions of the Act of 1864, ch. 306, to be issued against the assignors, and, as grounds for the process set forth in the affidavit, that he had good reason to believe that the defendants had assigned, disposed of, or concealed, their property, or some portion thereof, with intent to defraud their creditors ; and that they fraudulently contracted the debt, or incurred the obligation upon which suit was brought. The return to the attachment was, that it had been “ laid in the hands of Orville Horwitz, Esq., on the 9th day of April, 1867,” and “attached, as per schedule.” ⁵⁰² The schedule embraced a number of lots of ground, which were seized and taken as the lands and tenements of James E. Purvis, on the 9th of April, 1867. And on the return being made, Horwitz appeared as garnishee, and as claimant, and defended against judgment of condemnation.

He interposed two series of pleas: the first as garnishee, and the second as claimant. As garnishee, he pleaded: -1st. That thé defendants did not promise as alleged; 2d. That he had no goods of the defendants; Bd.

That the defendants had not disposed of or concealed their property, with an intent to defraud their creditors ; 4th. That the defendants did not fraudulently contract the debt as alleged. As claimant, he pleaded : 1st. That the property in the schedule mentioned was the sole property of James F. Purvis, Sr., and that on the 3d day of April, 1867, he conveyed the same to the claimant by a good and sufficient deed; 2d.

The bankruptcy of James F. Purvis, Sr., one of the defendants, and the appointment of the claimant assignee, since the attachment. To the several pleas thus pleaded, issue y^as joined, and they were all tried together as one case. At the trial, all the facts and circumstances attending the deposit made by the appellee, of the insolvent condition of the defendants, and of the making of the deed of the 3d of April, were laid before the jury. And the Court being required to instruct the jury by the respective parties, granted the two prayers offered by the appellee, and refused those offered by the appellant.

It is to this action of the Court that exception is taken. In regard to the first prayer that was granted on behalf of the appellee, we think it unobjectionable. It embraces all the essential elements to render the contract fraudulent. But, as applied to this case, it is decisive of nothing, except the question of fraud, in obtaining the appellee’s money. ⁵⁰³ Conceding the money to have been deposited under such circumstances as to make it fraudulent in the defendants to receive it, in what relation does the depositor stand to the defendants as bankers ?

Is it any other than that of an ordinary creditor ? The appellee knew that the money, so soon as deposited, would cease to be his, and that its identity would be lost so soon as it reached the till of the defendants. It at once became their money, to be used as they pleased. They were guilty of no breach of trust by employing it as their own.

They were not bound to keep it, or deal with it as the money of the appellee; but were oidy bound to repay him on demand, a sum equivalent to that paid in. Indeed, the proceeding adopted against the defendants concedes the relation of debtor and creditor to exist, for the demand is not for the specific money deposited, but for an equivalen! amount to the appellee’s credit in account with the defendants. Nor does the Act of Assembly, under which the proceedings are taken, give its aid to the appellee in any other character than as creditor. Taking the relation of debtor and creditor to exist between the parties, what is the predicament of the appellee in regard to the deed of assignment of the 3d of April, 1867, which is conceded to be, by its terms and conditions, such as is authorized by law ?

He sought to avoid the effect of the deed, as against himself, by treating it as the consummation of the fraud by which his money was obtained from him on the day previous to its date. In this view, the second